The Financial Samurai Investment Tracker Spreadsheet

One of the great things about following a financial game plan is that if you stick with it long enough you’ll be surprised at how much you’ll end up accumulating. Conversely, those who don’t follow a financial game plan will wake up one day wondering where all their money went!

For the past several years, my goal was to invest between $5,000 – $20,000 a month in order to generate enough passive income to take care of a family. I define investments as anything I put new money towards that has the potential of increasing my net worth e.g. paying down debt, buying an S&P 500 ETF, building a municipal bond portfolio, venturing into real estate crowdsourcing, expanding a home, and so forth.

With a $5,000 – $20,000 a month investing cadence, I figure my net worth should grow by at least $60,000 – $240,000 a year. If I stay disciplined over 20 years, then I could finally retire in Hawaii and do nothing instead of grind so much with all of you!

Everybody should at least max out your 401k so that worst case, you’ll end up a millionaire after a lifetime of contributions. Time in the market is truly an investor’s best friend.

2016 Investment Summary

For the first time, I’ve decided to do an analysis of all the investments I’ve made in a year to see if I actually followed through with my $5,000 – $20,000 a month investing goal. When we’re not diligently tracking our finances with free tools from the likes of Personal Capital, I’ve found our expectations are quite different from reality. Through tracking, I also wanted to see if I could observe any bad habits in order to make improvements.

I’d like everybody to list their monthly investments for the year and make some observations as well. Here are mine:

January: Bought $5,000 of VYM, (Vanguard High Yield Dividend ETF) in my after-tax investment account. I stuck with accumulating one equity ETF all year in my after tax investment account to simplify. VYM has a dividend of roughly 3.2%.

1) Bought $10,000 in VYM post Brexit. Actually put to work a total of $76,500 in idle cash, but took profits after a 4% rebound, hence why there’s only $10,000 in net new investments. I was very cautious the first half of the year and was just waiting for an opportunity that finally came

2) Venture debt capital call $750 (Fund II).

July: Venture debt capital call $2,150 (Fund II). Pretty slow month. Went to Hawaii for a first half business offsite. July was the one month I didn’t reach my $5,000 minimum investment cadence. Instead, I took some profits ($55,000) on an investment I made in 2012 to pay for my deck.

September: Rare equity offering, felt like I was going to miss a rally

1) Invested $50,000 in a S&P 500 structured note with 150% upside participation and a 30% downside barrier in my after-tax investment account. $40,000 of the $50,000 came from a called Netflix structured note that got called after one year. It’s too bad because the note was paying a 14% annual dividend and was way in the money. Net new investment amount = $10,000.

2) Deployed 100% of my remaining $150,000 rollover IRA cash in the 150% S&P 500 upside participation note as well. It definitely didn’t feel like a no brainer investing a total of $200,000 in this structured note at the time, but the terms of the structure note were just too attractive. Net new investment amount = $0 since I just used idle cash.

3) Invested $15,000 in this principal guaranteed (can’t lose money unless Citibank goes out of business) structured not that returns the average returns of the S&P 500, EuroStoxx 50, and Aggregate Bond Index after 5.5 years. In retrospect, this was a overly conservative investment that’s probably not going to return much at all.

$200K in the S&P 500 and $15K in a basket of S&P 500, EuroStoxx 50, and Aggregate Bond Market

4) Invested $10,000 via Fundrise in a commercial property with a target IRR of 18% over five years. Don’t let me down East Coast!

5) Paid down $6,600 of principal on a 2.375% mortgage.

6) Paid down $1,000 of principal on a 2.5% mortgage.

7) Paid down $12,000 of principal on a 4.25% mortgage.

8) Bought $5,000 shares of VYM.

October:

1) Paid down $5,500 of principal on a 2.375% mortgage

2) Contributed $18,000 to my self-employed 401k and invested the money 50/50 in DVY, the iShares Select Dividend Equity ETF, and IEF, the iShares 7-10 Year Bond ETF. DVY and IEF are commission free ETFs with Fidelity. I view this self-employed 401k as a bonus fund to build on the side with my side hustle income. More contributions will be made after I do my 2016 taxes in order to ascertain the exact contribution amount possible. I do some occassional corporate consulting to stay connected to society on top of my main business where I have a SEP IRA.

Investment Spreadsheet Overview

I’m probably missing an investment or I mistook some new money for existing money, but to the best of my knowledge, the above chart encapsulates the amount of new money I invested in 2016.

At one point in early 2015 I got down to about $35,000 in cash after paying off my condo rental property. It didn’t feel great having that little cash even though paying off a mortgage felt amazing. Then I got up to about $300,000 in cash in order to amass a large enough downpayment by the winter of 2017/2018 or winter of 2018/2019 to buy another property. But it felt bad earning only a 0.2% money market return, so I decided to start investing more aggressively in September.

Here’s what I’ve learned this exercise:

1) Underestimated my monthly investment cadence of $5,000 – $20,000. My real monthly average investment cadence is roughly $29,273. I’m basically investing the large majority of my earnings each month because I’m addicted to investing. Once food, shelter, and transportation are covered, all I can think about is what to invest in. Not a month went by where I didn’t put some capital to work.

2) Stock investments were front loaded in the first half of the year. When the market was tanking in February, I pressed a little more with a $15,000 equity investment. I tried to be opportunistic during the Brexit sell-off in June, but foolishly didn’t hold on to my $76,500 new money investment after a 4% rebound. If I held on, I’d be up another 5%+. Perhaps every year there’s this irrational optimism during the new year to invest in equities that I need to watch out for.

3) Started late with paying down my mortgage. I didn’t start a regular mortgage pay down cadence until August because my last refinance took almost four months, starting in March. I paid down $130,000 in principal to qualify for a 2.375%, $850,000 5/1 ARM. The $130,000 came mostly from money earned in 2015 and random asset sales. Each time I refinance, I like to pay down a chunk of principal to at least ensure I’m making good progress. In retrospect, I shouldn’t have been so aggressive in paying down my mortgage given rates increased and the stock market rocketed higher.

4) Irrationally paid down lower interest rate mortgages. I should be focused on paying down my highest interest rate mortgage of 4.25% with the smallest balance. But I didn’t because it reminds me of the bad timing I made buying my Lake Tahoe vacation property in 2007. I thought I was getting a deal when I bought it for 12% less than the previous owner, but then it proceeded to plunge in value by 30% – 40% during the financial crisis! I’m finally above water, but still down from my purchase price. At least this property has given me wonderful memories and I never plan to sell anyway. The condo serves as a great reminder never to confuse brains with a bull market. Always carefully analyze every single investment beforehand. I plan to always write about big purchases on FS before making a decision from now on.

5) The total amount invested in stocks and bonds is roughly $265,000. The new money investment split is 35% stocks and 65% bonds after going aggressive into bonds in November and December. The ideal timing would have been to invest $265,000 into the S&P 500 when it was down 10% in February. But timing the bottom is a fool’s game. For the new year, I plan to methodically invest in a 40% stocks and 60% bonds ratio to be more defensive. I’ve also rebalanced my portfolio to a 40/60 ratio as well.

6) Venture debt slowdown. After investing $120,000 in my first venture debt fund, I decided to only invest $50,000 in my second venture debt fund because I’m worried about my friend’s ability to make his target returns of 15%+. Due to large startup costs, the return for the first venture debt fund is closer to 8% if there are no more workouts in the portfolio. The amounts you see in the chart are capital calls. When you commit $50,000, you don’t send the $50,000 right away. Instead, you pay as you go when the General Partners find new investment opportunities. Capital calls are good in a way that it forces me to invest. If it wasn’t for a capital call in July, I would have invested in anything.

7) New asset class investment. I finally got my ears wet by investing $10,000 in a 5-year, 18% target IRR, commercial real estate deal in Conshy, Pennsylvania via Fundrise. The process was a lot easier than expected since everything was done electronically. I’ve earmarked another $10,000 for another deal, and plan to continue working my way up to building a $250,000+ real estate crowdsourcing portfolio this year. I’m hoping that with the historical 9% – 15% returns, and a rise in the required returns due to a rise in interest rates, I’ll be able to easily clear my modest 4% growth target with a diversified portfolio of 10 or so RE crowdsourced investments.

8) I have a dumbbell approach to investing. On the one hand, I like to invest smaller amounts when I first get started e.g. $10,000 in real estate crowdsourcing, P2P lending, etc. On the other hand, I have no problems swinging for the fences when I strongly believe in a particular investment, e.g. $178,000 in muni bonds in November and December, and two S&P 500 investments totaling $200,000. That said, I’ve gotten in trouble in the past by buying too much, too soon. Therefore, I should spread my investment tranches further.

How can I give Rhino up with such parking abilities?

9) Stayed away from wants and desires. Given I invested a large majority of my income each month, I didn’t leave room for buying anything unnecessary. I came very close to spending $60,000 – $70,000 on a mid-life crisis car three times this year, but didn’t because I always thought about how much I could have in 5-10 years if I invested wisely today. After every close spending call, I gave Rhino, my handsome 2015 Honda Fit, a good wash. Then all of a sudden my desire for a new car would fade.

10) Back-end loaded investments. Roughly 85% of my new investments were made in the second half of the year due to the presidential election. In other words, my investments are event-driven in nature because that’s when opportunities arise the most. I was very cautious the first half of the year because the job market and real estate market were slowing here in SF. For 2017, my biggest worry is that Trump creates too much foreign backlash due to incendiary rhetoric. I pray nothing terrible happens this year, but it feels like an inevitability.

Ex Mexico President’s tweet to Trump. Pretty entertaining, but worrisome for investors if foreign relations get out of control.

11) Compare the ratio of new investments with existing investments. The higher your ratio, the more active you are in growing your net worth. My goal is to try and grow my net worth by 10% a year. It gets harder to do as your net worth grows and your risk tolerance declines. This year, existing investments went up by ~8%, and new money investments went up by ~6%. In other words, my public equity/fixed income investments underperformed the S&P 500, but outperformed my investment target of 4% – 6% a year. However, it’s possible my real estate investments outperformed the S&P 500 (~40% of net worth) and I know my business value (20% – 30% of net worth) grew by much greater than 10% due to a 35% increase in top line revenue.

12) Keep on stretching. I’m now upping my monthly investment cadence to $20,000 – $35,000 a month on average. With this goal in mind, I now feel the pressure to keep on saving, earning, and grinding. I want to be like Mr. Zhang, the $271,000 a year janitor who challenges himself every day by not letting his $58,000 base pay or occupation get in the way. My prior minimum monthly investment target of $5,000 put absolutely zero pressure on me to try harder. With family responsibilities, the need for income is more important than ever.

Overall Insight

New investments + existing investments in a bull market = net worth acceleration. When times are good, it’s important to press as much as you comfortably can because good times don’t last forever. Eventually something bad will happen if you live long enough. When that time comes, we’ve got to rely on all our efforts during the good times to see us through.

My fear lies in missing out on investment gains instead of having nice toys to show off to my friends. Besides a mid-life crisis car, there’s nothing more I really want. Instead, it feels fantastic to continue practicing Stealth Wealth while ensuring that nobody in my family has to go back to work or struggle financially. Taking care of my family is now the most important duty I have.

Although ~$352,000 is a good amount to put to work, it’s smaller than the paper gains from existing investments. I was expecting a ~$300,000 decline in the value of my existing assets at the beginning of 2016. Such dumb luck is why I’m happy with paying down debt and building a muni bond portfolio for more modest returns. Dumb luck is also the reason why I want to actively contribute as much as possible so that I can rely less on luck to survive each passing year.

Track Your Investments Already

Everybody should already be tracking your net worth online. The easier it is to track your investments, the more you will pay attention to your money. Come up with your net worth goals and talk them over with your close friend, partner, or loved ones. You’ll learn something about your risk tolerance, your investing habits, and whether your actions are congruent with the way you think. Only then will you become a more disciplined investor over time.

In addition to leveraging the latest technology to grow your wealth, I’ve put together an Investment Tracker Spreadsheet for you to download. Input your own numbers to see how much you’ve contributed this year. Go through the same exercise I went through in this post to find out your tendencies. Feel free to change the categories or include all your financial investments, instead of just new money investments. I’m pretty sure that once you input all your numbers you’ll be surprised by the takeaways.

Achieving financial independence is all about developing a system and following through for a long enough period of time. Don’t be the donkey who frivolously spends everything he or she makes during a bull market, thereby missing out on incredibly lucky returns. Let’s try to maximize the good times for as long as possible!

Author Bio: Sam started Financial Samurai in 2009 to help people achieve financial freedom sooner, rather than later. He spent 13 years working in investment banking, earned his MBA from UC Berkeley, and retired at age 34 in San Francisco.

Sam’s favorite free financial tool he’s been using since 2012 to manage his net worth is Personal Capital. Every quarter, Sam runs his investments through their free Retirement Planner and Investment Checkup tool to make sure he stays financially free, forever. It’s free and easy to use.

For investing opportunities in 2019, Sam is most interested in investing in the heartland of America through real estate crowdfunding. Property valuations are much cheaper and net rental yields are much higher. There is a demographic trend towards moving away from higher cost areas of the country to lower cost areas thanks to technology.

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Comments

This is an excellent idea, and it also helps, I think, to record the ‘why’ of an investment when it is first made. That is, did I invest for diversification, a belief in outsized returns, or curiosity (a big one for me). I also find myself often in the ‘dumbbell’ approach you describe.

My 2016 investments were primarily in stocks, with a mix of mutual funds in my 401k and ETFs in my after-tax portfolio. No additional mortgage pay downs as I only have my primary residence that is locked in at a low rate. I invested $5,000 in P2P lending and $1,000 in real estate crowdsourcing in the latter part of the year. Like you, I start out slow with these new investment types. I plan on investing another $5,000 in P2P lending and $10,000 in real estate crowdsourcing in 2017.

I did buy some individual stocks during the year. I went through a stage where I thought I wanted to build a dividend stock portfolio. That has since passed as I would rather focus on growth now and leave income to when I retire. I didn’t invest a whole lot (about $2,500) before I changed strategies, but here is what I invested in:

I also invested a few thousand in non dividend paying stocks Salesforce and Berkshire. I have some other Berkshire (B class) shares that I’ve held for a long time. After a slow start in 2016, Berkshire ended up with about a 20% return (keep at it Buffett!)

I’m bullish on the stock market again in 2017. We may not see double digit returns again like we did in 2016, but I believe it will be a solid year with optimism continuing. I think we’ll get a much better idea of how the year will unfold during this first quarter as Trump starts to roll out his policies and repeal others.

I’m encouraged by your bullishness. Those were the good old days when I had enough courage to go aggressive for growth. After a 7-8 year bull market, I just can’t get myself to go all equities anymore. The 10% loss in Feb 2016 was painful, even though I put $15,000 to work.

My retirement goal is 2026. So even if we have a down year, I have time to make it up. It’s inevitable we will have one eventually, but people have been saying it’s coming since 2011/2012, and the market keeps going up. So I’m not going to try to predict when it’s going to happen. Instead, I’m sticking with my plan to keep investing each month.

I believe the optimism that stems from the projected tax cuts and reduced regulation will help businesses and drive the stock market higher in 2017. Who knows though. Trump could reverse on several of his plans. It wouldn’t be that big of a shock based on his track record. But I do think the tax cuts are a near certainty.

Well done Sam! As you said, you need to take advantage of the strong market, because it’s not going to last forever.

As for me, my investments were much easier to track and less interesting to read about. Maxed-out 401k with retirement account allocated across various Vanguard and other index funds. Maxed out HSA with every paycheck. I took 1/3 of my annual bonus, tax return and profit from my wife’s side-hustle and made extra mortgage payments in Q1. Another 1/3 went into kids’ college funds (Vanguard) and the last 1/3 was for fun.

As a bonus, keeping things simple makes tax time easier as well. I’ll be sharing details in a future post!

Good job. One of the reasons why I wanted to do an investment tracking review is to highlight what I sold to make sure I input the cost basis come tax time. I forgot once before, and the IRS sent me a $200,000 bill! It was wrong of course, but that gave me a heart attack that one year.

Pretty dull here, index fund investing with the only choices being tilt. Do I want more small cap, international, large cap US etc. International large cap, which was part of my chosen asset classes, didn’t pay off for me this year, but I remain cautiously optimistic for 2017. Otherwise everything else was smooth sailing. 2016 has a cloudy forecast at this time.

Very interesting to see that you actually invested more over the course of the year than your original targets. I would expect most people would be in an opposite situation. Seems to me more automation and following a defined strategy could be beneficial. While your investment decisions seem sound – are they being influenced by the latest news cycles and latest conversations you’re having? This may be bringing in some risk that you should protect against?

Yes, I am influenced by major invests. I run somewhat of a risk arb fund with my new money. Otherwise, it’s just the normal investment cadence each month into equity and fixed income ETFs. So think about it as a base $5,000/month investment in plain vanilla, and an extra $5,000 – $30,000 a month when there are bigger movements. It’s part of my own custom dollar cost average strategy.

I always have dry power waiting to try and take advantage e.g. February, Brexit, Trump election.

Thanks Samurai!
While i think i do a good job tracking all my other expenses in a spreadsheet, I’ve really been struggling with tracking my investments. There are so many more categories and complications due to tax codes, dividends, etc as you mentioned. Even index investing is a bit complicated, especially if you are holding the funds in a taxable account.

Also thanks for sharing your strategy for this year. I’ve become a big fan of front loading also, in large part due to your work.

Hope the spreadsheet helps you track this year and beyond. I’m not purposefully front or backloading my investments. I’m just pressing when there are major events like the Feb sell-off, or the Trump victory or Brexit surprise.

Perceptive question! It’s because my Solo 401k and my SEP IRA are with Fidelity, and they offer around 60 commission free trades. Because these two accounts are relatively small (~$100,000 each as I just started them on Jan 1, 2014), paying $7.95 a trade to buy only $5,000 – $15,000 worth of VYM or any other stock is too expensive. Therefore, I just chose a comparable alternative in terms of composition, fees, and dividend yield.

Being able to build a basket of 30 positions for only $7.95 with Motif is one of the main reasons why I like Motif’s value proposition. Unfortunately, what’s great for consumers is less great for companies as it means they aren’t making much revenue and I haven’t heard a fund raising announcement from them in 18 months, the general timeframe where startups need to raise more.

Whew, your portfolio is complicated. I’m interested in how the venture capital deal will work out. I guess you’ll get paid when the company goes public. Good luck.
I’ll also wait to hear how the real estate crowdfunding goes. I’m going to start this year and hopefully find a good deal. Sounds like you’re putting a good amount there this year.

For me, most of my investments are automated into my retirement accounts. I’m interested to see if I could squeeze out a bit more from what I get left over and start putting them into a taxable account like you do.

Try to squeeze more into after-tax investment accounts after maxing out the tax-advantaged retirement accounts. This is where you will see a much more rapid accumulation of wealth. Force yourself to do it for several months.

I’m currently working on maxing out the after-tax portion ($34,000 in 2017) offered by my 401(k). Once I finish that out, I’ll be squeezing the rest of my money into after-tax investment accounts as you said and hopefully build out a system for it.

My investments don’t span as many categories or types as yours, hence my uncomplicated approach (but you really sort yours out very well so to you it doesn’t come across as complicated). I think tracking the investments by month is a great idea. Understandably 2016 wasn’t the year to spurge on your new car… but I seem to remember you said 2017 was the year!

I actually have more categories (y column) I invested in this year (e.g. house expansion, private equity) I didn’t put into my spreadsheet because it was largely with existing investments! Folks are free to adjust the column categories as they see fit.

I’m definitely splurging in 2017. Gonna use some profits to pay for it!

Haha you sound really nervous about being a dad! Relax! Everything has a way of eventually working out on it’s own!!
You’ll be a great Dad and provider!
Besides you’re in America. You’re kid ain’t gonna starve.

“For the past several years, my goal was to invest between $5,000 – $20,000 a month in order to generate enough passive income to take care of a family.”

“With family responsibilities, the need for income is more important than ever.”

“Instead, it feels fantastic to continue practicing Stealth Wealth while ensuring that nobody in my family has to go back to work or struggle financially. Taking care of my family is now the most important duty I have.”

It was a good year for the markets overall. It looks like your investment strategy is quite diverse and opportunistic. Our investment strategy has been pretty basic – index funds and body fights. This year I started getting into more “exciting investments” including an angel investing. We made one investment only in a pre-commercial company, but it looked really positive. I thought there would be more opportunities, but the quality of the deal flow was not what I hoped it would be. We’ll see how it turns out in 2017 and my said you including an angel investing. We made one investment only in a pre-commercial company, but it looked really positive. I thought there would be more opportunities, but the quality of the deal flow was not what I hoped it would be. We’ll see how it turns out in 2017 and my Second year of early retirement.

I definitely like the idea of working to rely less and less on luck. My goals for this year are to pay off 60k left on primary residence mortgage while continuing to max retirement. Going to have to hit pause on my outside investing to do it, but I really like the idea of having no debt whatsoever at 35. Intellectually I know I would probably be better off keeping my low rate mortgage, but I want to make sure my family has a paid off home if anything happens to me and with homestead protection laws that gives me some comfort (or at least I like to think it will when I get it paid off).

We started seriously tracking our financials only last year, and from October to December we invested a total of $49,948. Most of that was invested via our mega backdoor into a Roth IRA and our taxable account (401ks were already maxed out before October rolled around). Our investments are all in boring index funds at Vanguard and Fidelity. Some of that is held in individual stocks – but not stocks that we judicially picked – just stock that we happen to get as part of our compensation package from our respective companies. We aren’t paying down our 30 year mortgage faster than we need to. The one new thing that I considering for this year is to diversify my bond portfolio to include some muni bonds. I’m not yet sure if I should just do VTEAX or actually try and buy individual muni bonds (that sounds like work. I don’t like work).

For munis, it depends on your tax rate and risk tolerance. If you are in the 33% tax rate, I think munis are very attractive right now after the sell-off. We hit 2.6% on the 10-year yield, and now we’re back down to 2.38%. I’ll be aggressively buying again if we get back to 2.6%. A 4.5% gross yield or greater is just too attractive not to buy given my mortgage rate is 2.5%.

After maxing out my 401K while working, of the 100% of money left over, about 50%-70% went into real estate, 20-30% went into equities, and 10% – 20% of it went into CDs.

Given I worked in equities, I wasn’t going to aggressively invest more into equities since my compensation and job were already the most levered to the stock market. Instead, I did my best to diversify AWAY from equities into real estate, my favorite asset class to build wealth since my career spanned between NYC and SF.

If I didn’t work in equities, I would have probably still gone long real estate for my primary residence, but perhaps I wouldn’t have bought three properties while I was working.

Do you think it would be reasonable for someone in your spot to invest, say, $100,000 in P2P lending, or is it too risky? You put quite a large sum of money into bonds and fixed income instruments in 2016, and it seems you are trying to protect your principal vs. be aggressive with it (which makes sense given your situation in life, family, etc.)

Do you think P2P lenders will lose a lot in the event of a recession? I’m interested in putting some money to work in that space, but it seems if something horrific were to occur, you could lose a good chunk of your investment.

I have a decent understanding of your thoughts from recent posts, but wanted to clarify.

In my spot? Yes, $100,000 wouldn’t be too big of a position to cause financial distress if things went wrong. But, after doing research on real estate crowdsourcing, I’d much rather invest there. The reason being, with P2P lending, I HATE it when people welch on their debt. Once they stop, they DISAPPEAR for good and there’s nothing I can do about it. W/ a diversified P2P lending portfolio, you should be able to ride out the welchers, as I have done over the past 4 years with a ~7.4% annual return. However, people stealing from me goes against my core.

With real estate crowdsourcing, at least there is a physical asset that can be optimized or worked out during difficult times. The likelihood of you losing everything is smaller if the deal is not too levered. Once can always cut rents, or sell the building at a discount to get SOME money back. W/ P2P lending, the person vanishes into the night

Best of luck on your monthly investment goals for 2017! I invested some $$$ in REITs instead of realty crowd souring because of the diversification in properties. What’s the main reason you decided to choose crowd sourcing VS REITs if I may ask?

Specificity. But your comment just reminded me that I did buy two REITS in November and December with spare cash. I invested in O and OHI in my SEP IRA.

I want to get more granular with where I invest my money in real estate. REITs have much wider exposure, and therefore, may get hit more in a rising rate environment. But if you do research on OHI, you’ll see it is specific to elder healthcare facilities.

I could write on and on about the reasons why invest in specific names, but I don’t want to give investment advice. I want to encourage everybody to follow a process.

Lots of good stuff there if you have the funds and ‘disposable’ income to allocate

As I’m doing this all on my own, I managed (finally) to max out my 401k and my ROTH, kicking my net savings rate to about 44% for 2016 (up from the 30’s in preceding years)

For this year, as some expenses of the past years have cleared, i hope to be able to make use the extra available funds to put into my plan as after tax and execute a Mega-Backdoor ROTH contribution (Hooray for MegaCorp for allowing it).

While I could split the contributions to Pre and After tax all along the way, I think Id feel better maxing out the available space first and then taking care of the conversions for the last quarter (or 2) of 2017 when I exceed the allowable 18k. Worst case, its a few thousand I already paid taxes on and the earnings. Unless the market goes nuts the final few weeks/months, it shouldn’t create a huge tax burden. I could have worse problems, right?

I will have to see about getting to 50% this year…depends on bonus and raise (my place is not known for being hyper-generous to cost centers vs revenue generating depts. IT is well regarded but not well compensated). The profit sharing and the 401k options are excellent, however, so to leap to someplace else would have to take that into account. I’m hoping for some progress in 2017.

Awesome to see such a detailed plan put to work. I was interested in tax-free returns so I put in 5k to CMF. I’m a bit skeptical of crowdfunded real estate because I don’t have control of the property. What if the person decides to keep it for longer or it doesn’t sell? The fund could not hit the target and it might take longer to get your money back or any gains in that situation. More risk, more reward I guess. I should have gone for the high yield Vanguard fund. Have you looked at the dividend stock sites like Dividend.com and suredividend.com? They have what’s called a dividend aristrocrats list which are dividend paying, high market cap companies who have increased their dividends every year for the last 25 years. The idea with this model is conpanies with higher earnings and dividends have better balance sheets and can handle an economic recession with more resilience than others.

I don’t expect a crash, although I can EASILY see a 10% correction in a month just like we had in Feb 2016. There might be a post swear-in hang over, who knows.

All I can do is control what I have, which is why I’ve gone defensive, shifting my equity allocation to 40% versus ~70% in 2016.

My bond purchasing in November/December should outperform in a stock market correct as well. You’ve already started to see bonds rally since December as the 10-year yield declined to 2.38%. The money I invested in bonds is opportunistic for the yield. I don’t expect to earn capital appreciation. If I do, it’s b/c of uncertainty.

I don’t predict annual stock returns, but the CAPE ratio of the S&P 500 is currently over 28. It’s only been more highly valued than that in 1929 and between 1997-2002. The long-term returns of the stock market when starting from a point this highly valued have historically been quite poor. The likelihood of mildly lower corporate tax rates is not enough to justify today’s high valuation.

Bonds are at historically low interest rates which have begun rising recently and may continue to do so. I’m not interest in bonds from a risk/reward standpoint until/unless interest rates go up. I have plenty of bonds in my indexed 401(k) but none in my other accounts for that reason. At this level they barely tread water with inflation.

“I’d love to know what type of investments you made last year and how you plan to allocate your capital this year.”

Last year and this year I’m focusing a lot on selling cash-secured puts. It keeps my cost basis below current market valuations, so if the market drops 25% my equity position would likely fall about 15%, while still allowing for around 12-20% returns if the market stays flat or goes up. It’s a structure I prefer in a highly-valued market like we have today.

UK’s FTSE 100 is reasonably priced, REITs in the US are reasonably priced, so I’ll be investing more there probably, and I’ll be putting cash into crowdfunding real estate like you’re doing as well. I also like silver at these levels, and have been investing there and will likely continue to do so.

This topic relates to my favorite financial ratio. I came up with it though I’m sure others have thought of it. Net worth/Total Income. The total income part is all income you’ve receive in your entire life! What is cool is that at age 50 I recently have a greater than 1.0 result which means that every penny that I’ve ever made (and my wife) I have in my net worth and more. That means that even though I’ve gone on trips around the world, paid taxes, bought diapers, etc., etc., etc. I still have all that I’ve ever earned in my entire life based on my net worth. Sounds crazy but it’s not that hard if you are a diligent saver and investor.

FS, I am a very good saver but not as good as you as it looks from this blog so I imagine you are probably a greater than 1.0 for the net worth/total income at 10 years my junior. The way I figured out my total income was to go back to all my tax returns and added all my “total incomes” from each year. The amazing thing is that now that I have built up this nest egg I will certainly improve on this ratio year over year with no additional savings as long as I cover my expenses simply by the growth of my current assets. Of course I can’t stop saving since it is so addictive.

Since the age of 17, I have wanted to be financially free. The thought consumed me, and I was constantly reading articles. To put it brief, it was my dream. Your articles were the ones that first got me interested, and I think I have read every single one! I have already started investing and have tried a few things here or there, but I haven’t really found a true fit yet. I’m 18 now, and am really looking for a mentor to steer me in the right direction. I know with a little bit of guidance I can do big things!

1) Maximizing your income and income streams by taking advantage of your energy. One day it will fade, and hopefully by then, you’ll be reaping the rewards.

2) Contributing as consistently as you can, which will make the bigger difference to your overall net worth the first 10-15 years of your investment life.

3) Reading everything you can about investing from all different perspectives. You need to read about what happened in 1997, 2000, 2008-2009 to realize there have been huge downturns in the past. Never confuse brains w/ a bull market.

Sam, I like your strategy of crowdsourcing RE investments but I am worried at some of the properties I noticed on the platform.
Took a random sample of SF properties and found the projections for selling price too optimistic even considering the Bay Area. I know Bay area so it was easy for me to conduct the analysis. I am wondering how to do that in an unknown area and avoiding buying lemons. Even if the investment is backed by RE; it hold little comfort when the value of the Re itself is much lower than what the market can bear. Thoughts?

I added approximately $275K of fresh capital into my after tax brokerage accounts and bought some equities that were on my watch list. Need to keep building out for the future.

I haven’t built up the bond ladder yet but I’m eyeing these opportunities. I am in a different tax situation where dividend income is taxed favorably given my federal tax credits from living overseas so I’m continuing to build up this channel.

Sam, your “Investment Summary” an excellent idea that I’ve added to my net worth tracking spreadsheet. The spreadsheet has 13 plus years of data updated monthly, and it reveals the magic of my saving and investing over time. Starting January 2017, my net worth tracker now includes any significant investments or financial events during a given month. I think of it as the road map to my current net worth, including any significant bumps. Just wish I had thought of this 13 years ago.

One more note, I enjoy and respect you talking about money, financial concepts and investments, but not acting as a financial advisor. This gives you greater credibility in my assessment.

I love the end of the year because I get to look at my lovely spreadsheet and see where I am at. Last year changed a lot for me and I’ve read a lot more. Should be clear of the credit card debt by April then snowballing into the medium term debts then plowing investments. Thanks for the posts, they are inspiring.

If you reinvested your dividend income that should count as new money. Factoring in my dividend income boosted my yearly contributions up by 20%. I have all my funds and stocks automatically reinvest the dividends so I didn’t even think of it until I looked at last years tax return. A very pleasant surprise.

I love how you will drop $150,000+ on Munis and then only $5,000 on AMZN. After reading your posts for the past 6 months I am still trying to wrap my head around the Financial Samurai system. There has to be some logic here! I am investing almost everything I make just like you, but I have been buying a ton of individual stocks ($100K+ in AMZN earlier in the year) and a few dividend finds (but not too many). I have been researching dividend investing more (trying to move beyond just index funds and tech stocks) and the $2,000-$5,000 annual dividend income goals most dividend bloggers have are too small for my tastes. Dividend stocks just seem way too expensive also. Thanks for sharing this. I was so focused reading it I almost missed my plane!

Man, that’s awesome you bought $100,000 of Amazon this year! I was too hesitant in the first half of the year to get too long into equities. I should have bought more, but it’s always shoulda, coulda, woulda. It’s what happens when you get old and risk averse. As they say, hindsight is always 20/20.

What else did you buy besides the $100K in Amazon? BTW, do you do still do SEO consulting work? I’m going to do the HTTPS transition one day this year and need some help making sure everything is optimized after.

In mid Feb I also bought CRM, NFLX, and my only bad decision was CMG. But I put a lot less money into them than AMZN. Only about $35K across them, but definitely made some money. I plan to hang on to CRM and CMG, but I’m pretty conflicted on NFLX. With so many other streaming options and big NFLX competition in Africa I don’t know if I will keep it.

Yes, I definitely still do SEO consulting and I am working with about 3 or 4 bloggers a month in addition to running my agency. HTTPS is a great decision – I’ve helped a few Universities do the switch recently and probably 25+ in my career, so I’m well versed with the challenges. You should see about a 5% organic lift pretty quickly, then obviously the impact over time should be greater.

I got some NFLX myself…. Reed Hasting, the founder spoke at my Berkeley MBA commencement in 2006 when the stock was at $10 and Wall STreet was bashing the hell out of it for going to zero. Should have put my entire life savings in then!

Just wanted to say thanks – it’s interesting to see other peoples investments strategies, especially in such detail.

Secondly, if you were able to put in over $350,000 in mostly after tax new money into investments – I greatly underestimated how much a blog like this could bring in! Has me re-evaluating my day job and side hustles. :)

The exercise was eyeopening for me as well. I hope you do the same exercise and learn something new.

I aggressively reinvest my passive income sources and business cash flow each month. I haven’t been really motivated to grow my online income due to what I feel are excess taxes and fees. But if the corporate tax rate gets cut to 15% as Trump proposes, I’m going to go all out for the next 4 years to try and earn as much as possible before tax rates go up. Why not right? It’ll be fun!

I put another $4000 into my business, $4000 in my IRA that is 90% equities and directed as a Target Retirement Date account, and used $4000 to pay down debts. I also played with individual stocks and spent less than $100 trying to learn a little about DGI and how those processes feel.

Sam, what are your thoughts on maxing out 403b even if a couple has 60-70% of their highest paid year coming in the form of a pension? Would you still max out the pre-tax dollars (36K) or dedicate more savings to after-tax if it’s impossible to invest significantly in after-tax after maxing out the 403b accounts (with college tution quickly approaching, etc.).

Am expecting a correction soon as well so scaling back on equities. Still looking at Realtyshares & Fundrise, but, hesitant to pull the trigger since these are not tangible assets. Also, as you mentioned in your previous post, waiting for the Property correction to jump in and hold onto something more tangible. Hey Sam, have you looked into “RoofStock”? What do you think of it?

Prices have already been correcting in places like SF and NYC for about a year now. It’s the heartland of America that’s good value and has lots more upside IMO, especially with the Trump administration’s policies.

That’s an impressive amount of capital to put to work. I especially like the AMZN purchase. It’s the best company out there today and my second largest position. That and Google are the best companies in the world right now, IMHO. Best regards, 10

Awesome job on your investments! It’s such a great idea to track everything. It really does add up quickly and getting into a rhythm can pay off nicely.

Last year I worked on rebalacing and increasing my exposure to bonds through emfs like CMF. I also continued to add to my positions in DVY and invested into a couple structured notes.

This year I plan to continue legging into my existing positions and possibly increasing my international exposure. Emerging markets are tempting me a bit but I’ve been burnt before so I’m still cautious. My goal is to invest at least $10k a month this year.

After buying a lot of muni bonds in December, my hope is 2%-3% principal appreciation while collecting a 4% – 5% gross dividend yield. But I’ll settle for 0 principal gain and a 4% – 5% gross dividend yield. I’d like to eventually build a muni portfolio equal to my mortgage to 100% live for free.

Hi Sam! Happy 2017. another great post.
REAL Financial Planning is about helping us get really clear on what we want to do. Having said that, I loved reading: “For the past several years, my goal was to invest between $5,000 – $20,000 a month in order to generate enough passive income to take care of a family.” If MORE people were able to summarize their goals like you have (and more importantly take action on it), the financial independence revolution would be something of a reality!

Until then, we (as you say) keep grindin’.

Since ‘sharing’ is a common theme here, let me say I continue to use your “Above Average Net Worth for the Above Average Person” as a measuring stick.

For 2016, my wife and I max’d out our 401k, IRAs and also saved over 35% of our after tax income. Re cc debt, none (800 club baby!) and our major liabilities is our mortgage (which we pay every 15 days to accelerate our principal payments, and squeeze our prop tax deductions for year end). We only use a CC to maximize points for the cash back incentives.

For 2017, our new goals include increasing our after tax savings to 50%. YTD we’ve saved 48% (not including our tax-deferral contributions); and tighten our expenses on ONLY the things we need. To your point, I loved how you went through the motions of a crisis car purchase but ultimately decided to keep your HondaFIT.

Great job maxing out your pre-tax retirement accounts AND saving 35% afterward! Once you get to that 50% savings amount, it’s like the seas part where you’re just banking freedom each year that goes by at a 1:1 ratio. It gets super addicting, and it’s something I miss, so enjoy the journey!

Great post and definitely love summaries – I think we all do. I remember in late 2015/early 2016 I wanted to commit to an overall $3K in investments in the year in the market alone… turns out I had almost $45-$46K done on the year, and trumped the hell out of what I thought was going to be consistent & difficult. Always go harder and stretch further, now I even have a new baseline of well over $40K expected per year to be contributed/invested. Thanks again FS, keep it up.

Have put a bit of money to work in alt-energy sector based ETFs (PBW & TAN).
IMHO S&P is a bit extended now – but this sector still trades like it’s 2009. It will be a long-term hold for me but optimistic that today’s trash is tomorrow’s treasure.
Watching the XBI also.

Hey Sam, it seems like you have a high net worth with a decent chunk of change to invest. VYM is a good basket of stocks, but why not something like the VTSMX (total stock market)? Over the short term (1 year) to long term (5-10 years), VTSMX has consistently beat the VYM and offers a more diversified portfolio to protect your investment. Curious.

Hi Sam, been following your blog for quite some time now. Thanks for your insightful posts. My question is, why did you select muni bonds that pay ~2-3% yield when there are other bonds in out there that pay more? What do you think of corporate bonds at the moment? I’m no expert in bonds but am in search of good bonds to buy.

Secondly, what are your thoughts on high div stocks (VYM etc) versus bond investments at this moment for the next 2-3 years?

1) RealtyShares is based in SF, some I’m partial to helping/investing in SF-based companies
2) The CEO went to Haas Berkeley for his MBA like me
3) I’ve met the CEO, VP of Finance, Director of Marketing, Marketing Manager, and Capital Markets person multiple times (at a conference, lunch, at their office)
4) They were very responsive over e-mail, whereas one firm in LA who contacted me were not, then their CMO left. Fundrise was also very responsive and excellent to work with.
5) They’ve raised a good amount of money and have been operation for 4 years, longer than most
6) They’ve got the most robust platform in terms of number of deals so far

At the end of the day, I want to focus my attention on one platform. It’s easier and more efficient for me. Fundrise is pretty good too, it’s just a little less familiar since they are in the DC area. It really gives me confidence when I can meet with people in person.

I started out with $500 investing in my online brokerage account. It was Ameritrade for me back then. Always good to start small and work your way up as you get more experience and knowledge.

Commission costs have come down since then, and now a trade costs $7.95 or less at most places. Motif Investing is cool because you can buy up to 30 positions for $9.95. That’s a huge savings for investors just starting off. The problem I see is that it’s hard for Motif to make any money. Hopefully investors will keep investing in them to help subsidize the retail investor.

The details you have provided are just amazing. It is inspiring too. For me, I do NOT have anywhere close your investment. But there are some positive improvement I have done in 2016 compared to previous years.

1) Maxed out my 401K ($18,000) (80% Vanguard Small Cap Index fund. 20% Vanguard total Bond Market index fund). That’s the best I could find in my company 401K choices.

Hi Sam, it is a great article and it inspires me to go ahead with my plan for 2017 to save and invest more aggressively.

The stock market is doing great but it seems to me that it has been doing great for too long. I am not complaining of course, but still it makes me thing that there must be a turning point some time. Just to be prudent,

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